7 Tips for Cash Home Buyers
If you are investing in real estate and buying houses for cash, you want to be careful to make the right decisions. You don’t want to get in over your head and/or stuck with a bad property that ends up providing more pains than gains. Here are a few helpful PropertyLark tips for cash home buyers:
1. Research the Market
Before you buy any house, research the market around it. Are homes selling quickly for good flip value? What are the rental price trends if you plan to keep it as a rental property? Look for good deals in up-and-coming neighborhoods, or at least in areas where the prices are somewhat consistent and predictable.
2. Analyze the Property
Property analytics are a key part of any real estate investor’s success. You should know the market, but also what is needed to get profit out of any house you are buying. How much time and money need to go into a proper renovation? What upgrades will boost its value? What is the potential return on investment (ROI) if everything goes as planned?
3. Plan for the Worst
A common mistake from unexperienced real estate investors is looking only at “pie in the sky” projections. You assume you will get top dollar from the property when it is ready to sell or rent, but that isn’t always the case. Plus, renovations and repairs often end up costing more than expected. There are almost always some surprises along the way. Smart cash home buyers are very conservative in their projections. They over-estimate the budget and timeline. They plan for the lowest end of the resale value. This is how you ensure profitability, even if things don’t go exactly as you hope.
4. Make Fair Offers
You can try to make a bunch of lowball offers and hope a seller bites. Today’s real estate market is competitive, and even desperate sellers may be getting multiple offers from other cash buyers. Don’t overpay for a property you want, but don’t go so low that your offer will never be taken seriously. Do your market research and property analytics to find an offer point that will be appealing to the seller while still leaving enough meat on the bone for you to turn a profit.
5. Get to Know the Seller
Too many real estate investors look at this business as purely a numbers game. You always have to remember that there are emotions involved for many sellers. They may not want to sell, but are in a position where they have to get out from under their property. Maybe it’s an inheritance from a lost relative. You are buying houses. They are selling “homes.” Take some time to get to know the seller. Understand their motivations. Build a sense of trust. This will help you create win-win situations where both you and the seller feel good about the deal.
6. Stick to Your Plan
As a cash real estate investor, you have to be careful not to get caught up in the emotional aspects of the process. Understand the seller’s motivations, but don’t let emotions drive your decisions. The numbers still need to make sense for you. Have an investment plan and budget in place. Don’t overpay for properties. Don’t go overboard on renovation costs. Stick to your plan and stay focused on creating positive investment results.
7. Join a Real Estate Network
Consider joining a home buying network like we offer at PropertyLark. We give members exclusive access to off-market deals, property analytics tools and other resources to help you become a more successful real estate investor. To learn more, visit our buyer’s page or fill out the contact form to the right to see if you qualify for our network.